Medicare Supplemental Insurance Eligibility

A Medigap policy, or Medicare supplemental insurance plan, is an insurance policy that is offered by a private insurance company that is approved by Medicare. The word supplemental makes some people think that this is insurance that covers additional services which are not covered by Medicare Part A and Medicare Part B insurance, such as dental, hearing, vision, and long-term care benefits. However, a Medigap policy does not cover these things. Other people think it may cover prescription drugs. At one time, some Medigap policies did indeed include prescription drug coverage, but all policies issued since 2006 are not allowed to offer prescription drug benefits. Rather than offering additional benefits, Medicare supplemental insurance plans extend the coverage already existing in original Medicare Plan A and Plan B.

In fact, in almost all states (except Minnesota, Massachusetts, and Wisconsin), Medigap policies are categorized into plans with letter names (A-N). Each of these letter named plans are required to include standard elements of coverage, no matter which insurance company offers them. There are nine core elements of Medigap coverage. They are:

  • Medicare Part A Coinsurance and Hospital Stays (up to 365 days past the date Medicare benefits are used up)
  • Medicare Part B Coinsurance or Copayment
  • Blood (the first three pints)
  • Part A Hospice Care Copayment or Coinsurance
  • Skilled Nursing Facility Care Coinsurance
  • Medicare Part A Deductible
  • Medicare Part B Deductible
  • Medicare Part B Excess Charges
  • Foreign Travel Emergency (up to plan limits)

For instance, all plans denoted as Medigap Plan A must have 100% coverage for the first four of these categories. This means that when you compare standard plans between different insurance companies, the only difference will be the price.

There are very few requirements for Medicare supplemental insurance eligibility. The first and foremost is that you must have Medicare Plan A and Plan B coverage in order to have a Medigap plan. If you have Medicare Part C, also called a Medicare Advantage Plan, you do not need a Medicare Supplemental Insurance Plan.

The second Medicare supplemental insurance eligibility requirement is that you are 65 or older. Though there are some insurance companies that will sell a Medigap policy to a disabled person receiving Medicare benefits, the vast majority insist that you wait until you are 65 years of age. The government does not require that private insurance companies sell these supplemental policies to persons under the age of 65, so most of them do not do so. They do not have to establish rules of Medicare supplemental insurance eligibility for persons under 65 either.

Medicare Supplemental Insurance Eligibility and The Open Enrollment Period

Your Medigap open enrollment period is a six month period which occurs only once. It starts the first month your Medicare Part B coverage is in effect once you are at least 65 years of age. During this open enrollment period, you have the right to purchase ANY Medigap policy that is sold in your area, regardless of your medical conditions (past or present). During this period, insurance companies cannot charge you more because of negative medical underwriting either. Once enrolled in a policy, you are guaranteed renewal each year as long as you continue to pay your premiums. If you wait until after this open enrollment period, you may be charged more or denied coverage because of your medical history or current condition.

When you are shopping around during your Medicare supplemental insurance eligibility period, you may be tempted to go with the cheapest policy available to you. However, it is important to check and see how the insurance company calculates the price of their Medigap policies. There are three main ways that insurance companies establish prices for Medigap policy premiums:

  • Community rated
  • Issue-Age rated
  • Attained-Age rated

Community rated policies are not based on age at all. The prices may up based upon inflation or other reasons but not because you got older. In fact, usually everyone who has the policy pays the same price, regardless of whether they are older or younger than you.

Issue-Age rated policies set the prices based upon the age you are when you sign-up. This means that the younger you are when you purchase the policy, the cheaper the premium costs will be.

Attained-age Medigap plans are priced according to how old you are. The prices go up as you get older. Often these are cheaper in the beginning, but they can grow to be the most expensive of the three options in the long run.

Your Medicare supplemental insurance policy acceptance and price may also be dependent on a medical underwriting process that is specific to the private insurance company.

When you enter your Medicare supplemental insurance eligibility period, you would be wise to take a step-by-step approach to purchasing a Medigap policy. First, look at the A-N plans and decide which one offers the benefits you need from a supplemental insurance policy. Second, check to see which insurance companies sell the Medigap standard policy plans you are interested in within your area. Third, contact those insurance companies and find out more about the policies, including price and pricing policy. After following these steps, you can make an informed and educated decision about what Medigap policy is right for you.